In an effort to combat the rising inflation and the disastrous economic policies of the former Prime Minister Liz Tarras, the Bank of England announced the largest hike in interest rates in thirty years.
After consumer prices started to climb again in September, reaching their highest level in forty years, the bank increased the main interest rate today, Thursday, by three quarters of a percentage point to 3%.
This action is being taken to stop inflation from becoming an actual economic factor, consistent with market expectations, following a half-point cautious rise six weeks ago.
The Liz Terrace government’s announcement of unfunded tax cuts totaling 45 billion pounds, which caused turmoil in the financial markets and drove Taras to resign after just six weeks, is what sparked the current interest rate decision.
Her replacement, Rishi Sonak, issued a warning against cutting expenditure and raising taxes at a time when he is working to fix the harm and demonstrate Britain’s capacity to pay its debts.
The increase in interest rates is the eighth in a row for the England Bank and the largest since 1992; it follows the US Federal Reserve’s announcement on Wednesday of a fourth consecutive increase by three quarters of a point. Central banks all over the world are dealing with declining inflation that is slowing the expansion of the economy.
The highest increase in interest rates in 30 years is announced by the Bank of England.
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